Some good news on overinvestment in an employer’s stock

From former CBO director and soon to be Office of Management and Budget director Peter Orszag.

The overall share of 401(k) participants with 90 percent or more of their assets invested in company stock is more like .47*7.3=3.4 percent. It’s still too high…The good news is that the trend is towards less investment in company stock. For example, in 1999 EBRI estimated that 19.1 percent of all 401(k) assets were held in company stock…By 2006, that share had fallen to 11.1 percent.

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This entry was posted on December 3, 2008 at 2:32 am and is filed under Blog posts. You can follow any responses to this entry through the RSS 2.0 feed.
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3 Responses to “Some good news on overinvestment in an employer’s stock”

I think it is wise to have a very diversified portfolio and if you have a better perspective on what is going on at your company than go ahead and buy up the stock. However the average employee doesn’t understand the complexity of a large entity. I suggest that you have a maximum of 5% of your company stock.